funding in public: the new playbook for indian startups

Vaibhav Gupta
Jul 8
6 min read

An investor icon peeking from behind a curtain, watching a founder present on stage to an audience.

The Traditional Funding Struggle

Picture this conversation between two founders at a Bangalore co-working space:

Rahul: "Yaar, I've been sending cold emails to VCs for three months. 200 emails, 5 responses, 2 meetings, and zero funding. I'm exhausted."

Priya: "What if I told you there's a way to make investors come to you while building your customer base simultaneously?"

Rahul: "Impossible. That's like saying you can lose weight while eating more food."

Priya: "It's called 'funding in public,' and it's exactly what Razorpay's Harshil Mathur did before they became a unicorn."

This conversation happens daily across India's startup ecosystem. According to industry reports, the vast majority of startups seeking funding fail to secure their first institutional round. But there's a growing movement changing this narrative.

What is Funding in Public?

Funding in public is a strategic approach that combines four interconnected elements:

Content Creation - Building authority in your domain
Building in Public - Transparently sharing your startup journey
Crowdfunding - Leveraging your community for initial capital
Attracting Lurking Investors - Drawing institutional investors organically

If you are a startup founder, click here :)

The Indian Context

India's startup ecosystem is uniquely positioned for this approach. With over 750 million internet users and the world's largest social media audience, Indian founders have unprecedented access to potential customers and investors.

According to the latest EY-IVCA report, PE/VC investments in India reached US$13.7 billion across 284 deals in Q1 2025 (Source: EY-IVCA Report). However, the funding landscape remains challenging for early-stage startups without established networks.

The Four Pillars Explained

1. Content Creation: Your Authority Building Engine

The Mistake Most Founders Make:

Let's continue with Rahul and Priya's conversation:

Rahul: "But I'm not a content creator. I'm a tech founder building a fintech solution."

Priya: "That's exactly your advantage. You're solving a real problem. Share that journey."

Rahul: "What would I even talk about? 'Day 47: Still debugging payment gateway integration'?"

Priya: "Actually, yes! Do you know how many fintech founders face the same issues? Razorpay's early blog posts about payment failures in India got them their first 100 customers."

The key is focusing on your Ideal Customer Profile (ICP), not fellow founders. A study by HubSpot found that 70% of B2B buyers consume 3-5 pieces of content before engaging with a sales representative.

Indian Success Story: Freshworks' Girish Mathrubootham built his authority by writing about customer service challenges faced by Indian SMEs. His blog posts attracted not just customers but also early employees and investors who understood the market deeply.

2. Building in Public: The Transparency Advantage

Building in public means sharing your progress, challenges, and learnings openly. This isn't about oversharing but strategic transparency.

According to a 2023 study by Buffer, companies that share behind-the-scenes content see 67% higher engagement rates than those sharing only polished marketing content (Source: Buffer State of Social 2023).

Zerodha's Nithin Kamath regularly shares the company's financial reports, challenges, and decision-making processes on social media. This transparency has built immense trust and attracted both customers and talent.

3. Crowdfunding: Your Community as Co-investors

India's crowdfunding landscape is evolving, though regulatory clarity remains limited. SEBI has been cautious about crowdfunding, releasing consultation papers since 2014 but without comprehensive regulations yet (Source: SEBI Consultation Paper on Crowdfunding). Current crowdfunding activities operate under existing securities laws and Alternative Investment Fund (AIF) regulations.

The Numbers:

Indian crowdfunding market potential is significant but regulatory framework is still evolving
Platforms like Ketto, Milaap, and others operate under donation-based models
Success rate for campaigns with pre-built audiences: significantly higher than cold campaigns (can go as high as 60-70% vs 20-30%)

Success Story: Bombay Shaving Company raised ₹35 lakhs through pre-orders and community funding in their early days, leveraging their audience of engaged followers before institutional funding rounds.

4. Attracting Lurking Investors

Here's where the magic happens. As you build your audience and demonstrate traction, investors start watching.

A Realistic Scenario:

Investor (Commenting on LinkedIn): "Interesting insights on D2C logistics challenges in tier-2 cities. Are you currently raising?"

Founder: "We're focused on growth right now, but always open to strategic partnerships."

Investor: "Would love to learn more about your metrics. Coffee next week?"

According to industry reports, a significant percentage of Indian startup investments now come through founder-investor connections made via social media and content platforms, highlighting the growing importance of online presence for fundraising.

do you have an idea you want to make real? Click me :)

The Implementation Framework

Phase 1: Foundation Building (Months 1-3)

Week 1-2: Platform Selection

Choose one primary platform where your ICP is most active
For B2B: LinkedIn dominates with 76 million Indian users
For B2C: Instagram (230 million users) or YouTube (462 million users)

Week 3-12: Content System Creation

Block 2 hours daily for content creation
Document your problem-solving process
Share industry insights and challenges
Test different content formats

Use regional languages strategically. Content in Hindi, Tamil, or Bengali often sees 40-60% higher engagement in respective regions (Source: Social Media Language Usage Studies).

Phase 2: Community Building (Months 4-6)

Newsletter Launch:

Start collecting emails from day one
Share exclusive insights not available on social media
Aim for 1,000 subscribers before considering crowdfunding

Community Engagement:

Respond to every comment and DM
Create polls and ask for feedback
Share user-generated content and testimonials

Phase 3: Monetization Preparation (Months 7-9)

Metrics to Track:

Email open rates (target: >25%)
Social media engagement rates (target: >5%)
Website traffic growth (target: 20% monthly)
Customer acquisition cost from content

Compliance Considerations:

Understand current securities laws and AIF regulations
SEBI continues to evaluate crowdfunding frameworks (Source: SEBI Consultation Papers)
Consult with securities lawyers familiar with Indian regulations
Prepare necessary documentation for any investment activities

Phase 4: Funding Launch (Months 10-12)

Crowdfunding Campaign:

Launch with 20-30% of target already committed
Share regular updates with investors
Use the momentum to attract institutional investors

Common Pitfalls to Avoid

1. The Peer Trap

Wrong Approach: Building an audience of fellow founders who can't buy your product.

Right Approach: Focus on potential customers who can become paying users and potential investors.

2. Premature Crowdfunding

Wrong Timing: Launching a campaign without an engaged audience.

Right Timing: Having at least 1,000 engaged followers and 20% of funding target pre-committed.

Compliance Considerations: Risk: Violating securities laws while promoting investment opportunities.

Solution: Always consult legal experts familiar with Indian securities laws and follow prescribed disclosure norms (Source: SEBI Guidelines).

The ROI of Funding in Public

Let's break down the potential returns:

Traditional VC Approach:

Time spent: 6-12 months
Success rate: 3%
Average deal size: ₹2-5 crores
Customer acquisition: Separate effort post-funding

Funding in Public Approach:

Time spent: 12-18 months
Success rate: Varies based on execution quality and market conditions
Average initial community funding: ₹10 lakhs - ₹1 crore
Customer acquisition: Built-in during the process

Real Indian Success Stories

Case Study 1: CRED's Kunal Shah

Before CRED, Kunal Shah built a massive following by sharing insights about behavioral psychology and Indian consumer behavior. His 1.2 million Twitter followers became early adopters of CRED, and his thought leadership attracted top-tier investors even before the product launch.

Case Study 2: Mamaearth's Ghazal Alagh

Ghazal consistently shared her journey as a mother concerned about baby care products. Her authentic storytelling attracted not just customers but also like-minded investors who understood the market opportunity.

The Future of Funding in India

With evolving regulatory frameworks and India's growing retail investor base, funding in public is becoming more accessible. Industry reports suggest that retail participation in equity markets continues to grow, presenting opportunities for innovative funding approaches.

This presents an unprecedented opportunity for Indian startups to build sustainable businesses while raising capital from their communities.

Final Thoughts

Funding in public isn't just about raising money—it's about building a sustainable business with a community of invested stakeholders. It requires patience, consistency, and authenticity.

As Priya told Rahul at the end of their conversation: "The best time to start was yesterday. The second-best time is today."

Ready to start your funding in public journey?

Share your startup's biggest challenge in the comments below. Let's build a community of founders supporting each other in this journey.

Have a funding question? Reply to this newsletter, and we might feature your question in our next issue.

Keep Building, The Build3 Team

Building with Build3 is a biweekly newsletter helping Indian entrepreneurs build better startups. Subscribe for more insights on fundraising, product development, and scaling your business.

Resources mentioned:

SEBI Official Website: https://www.sebi.gov.in/
Indian Private Equity and Venture Capital Association: https://www.ivca.in/
EY-IVCA Reports: https://www.ey.com/en_in/industries/private-equity/pe-vc-monthly-roundup
Bain & Company India VC Reports: https://www.bain.com/insights/india-venture-capital-report-2024/
Buffer State of Social Report: https://buffer.com/state-of-social-202 3
Investment Promotion Portal: https://www.investindia.gov.in/

Disclaimer: This newsletter is for educational purposes only and should not be considered as investment or legal advice. Always consult with qualified professionals before making funding decisions.